Facebook has announced that Facebook News will be going by the wayside in 4 European countries, throwing another wrench into link taxes.
One of the concepts pushed by link tax supporters around the world is that if every country around the world implemented their own link tax policy, then the platforms would have no choice but to start dolling out cash to the media companies. The (badly thought out) strategy is born out of the false premise that platforms depend entirely on news links for their business model. The overwhelming evidence, however, is that platforms like Facebook don’t depend on news links at all and, in fact, the platform could easily drop news links altogether and they would remain unaffected.
The short answer as to why that is is that Facebook’s business model actually depends much more on social connections. People want to talk to their friends and keep up to date with relatives and family. A lot of that kind of activity goes on on Facebook and it is what helps make the parent company, Meta, profitable. It is also a big reason why, despite repeated scandals, people continue to stick with the platform. It is really difficult to get people on a large scale to leave the platform because of those social connections. This also goes a long way into explaining why the Canadian media companies second boycott failed spectacularly.
If you ask general Facebook users (at least in Canada) why they go to Facebook, it’s very likely going to be about seeing funny pictures or memes or talking to people they know. Very few, if any at all, go to Facebook to read the news. As a result, when Facebook blocked news links, the reaction from users was either seeing how strange the platform looks with the sudden dropping of news links, but not the end of the world, or, they felt that their experience on the platform actually improved with the loss of news links.
For some supporters of the Online News Act, there might be some thinking that they would have to wait things out as these laws are passed in other countries before the money starts rolling in. The problem is that for those who know the platforms well enough, if a company like Meta had to choose between kicking news links globally to the curb or paying billions of dollars to carry those links, chances are, Meta would opt to ditch those news links. At the end of the day, news links may be a “nice to have”, but it certainly isn’t a “must have”.
For those who doubt this thinking and still think Meta absolutely depends on news links, a recent announcement by Meta put further cold water on that. From a recent Facebook announcement:
Today, we are announcing that in the UK, France and Germany we will deprecate Facebook News – a dedicated tab on Facebook in the bookmarks section that spotlights news – in early December.
This is part of an ongoing effort to better align our investments to our products and services people value the most. As a company, we have to focus our time and resources on things people tell us they want to see more of on the platform, including short form video. We know that people don’t come to Facebook for news and political content – they come to connect with people and discover new opportunities, passions and interests. News makes up less than 3% of what people around the world see in their Facebook feed, so news discovery is a small part of the Facebook experience for the vast majority of people.
The changes affecting the Facebook News feature will not otherwise impact Meta’s products and services in these countries. People will still be able to view links to news articles on Facebook. European news publishers will continue to have access to their Facebook accounts and Pages, where they can post links to their stories and direct people to their websites in the way any other individual or organization can. News organizations can also still leverage products like Reels and our ads system to reach broader audiences and drive people to their website, where they keep 100% of the revenue derived from outbound links on Facebook.
While we’ll be deprecating Facebook News in these countries, we will honour our obligations under all existing Facebook News deals with publishers in the UK, France and Germany until they expire. However, to ensure that we continue to invest in those products and services that drive user engagement, we will not enter into new commercial deals for news content on Facebook News in these countries and do not expect to offer new Facebook products specifically for news publishers in the future.
All this isn’t to say that news content isn’t important. It certainly is. The problem here is expecting online platforms to pony up a stack of free cash to the publishers and broadcasters for news links being posted to their platforms – news links that matter so little to the platform. The broadcasters and publishers may feel that they are continuing to be the centre of attention, but that status of being something that everyone pays attention to has long since passed.
As a result of all of this, when other countries start demanding massive payments for carriage of news links, platforms like Facebook are more likely to just drop news links entirely rather than pay for the ransom payments. News publishers and broadcasters don’t have the bargaining chip they think they do in this situation. As Facebook continues to move further and further away from news links, that lack of bargaining power is only going to diminish further as time goes on. So, when such link tax laws are passed in the rest of the world, the decision to drop news links will be trivial for a corporation like Meta. This latest announcement only further adds to the evidence of this.
(Via @MGeist)
Drew Wilson on Twitter: @icecube85 and Facebook.
